When Article 2 is silent on an issue of sales contract formation or interpretation and
there is no state statutory law in place on that matter, _____.
A. The common law rules apply
B. The civil law rules apply
C. Federal common law applies
D. Federal statutory law applies
E. The Uniform Sales Act applies
According to the ______ Amendment to the Constitution, all powers that the
Constitution neither gives exclusively to the federal government nor takes from the
states are reserved for the states.
A. First
B. Second
C. Fifth
D. Sixth
E. Tenth
“Hawaiian Adventure.” Beverly decides to go on a great trip to Hawaii. She needs
someone, however, to take care of her two dogs, Creaky and Toady, while she is gone.
She hires Frank three months in advance and they reach a contractual arrangement
whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over
two months before Beverly is set to leave, takes one look at Creaky and Toady, and
declares that they are too creepy to be around. Beverly hires Alice who agrees to care
for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls
and tells her that she just broke both her legs in an automobile accident and has been
put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and
heads off to Hawaii where she has a great time. Unfortunately, when Beverly returns
home, she finds that Betty has absconded with Creaky and Toady. They were later
found in good health in an exclusive resort visited by Betty. Betty refuses to return
Creaky and Toady to Beverly claiming that they were all enjoying the resort and that
she had become quite attached to them.
Which of the following is true regarding Frank’s refusal to keep Creaky and Toady?
A. He committed an anticipatory repudiation.
B. He is not guilty of any breach because he gave Beverly sufficient warning that he
was not willing to perform.
C. He is not guilty of any breach because the contract is not over $1,000 in amount.
D. He is guilty of an immaterial breach because of the low value of the contract.
E. He is guilty of a nominal breach.
Which of the following are elements of causation?
A. Actual cause and proximate cause.
B. Actual cause and significant cause.
C. Actual cause and clear cause.
D. Proximate cause and significant cause.
E. Proximate cause and real cause.
“Bad Hair Day.” Molly started a new hair salon and leased space for the salon from
Peggy. Unfortunately, Molly’s styling caused some problems for customers. One
customer’s hair turned green from her bleaching process, and she burned another
customer with a curling iron. Not surprisingly, Molly had little business and was unable
to pay her lease payments as they came due. Peggy filed a lawsuit against Molly and
obtained a judgment against Molly for $7,000 in past due rent. Peggy asked for a
court-ordered judgment permitting the sheriff to seize and sell Molly’s equipment
including her hair-dryers, pedicure chair, nail polish, and other items, but the judge
refused her request. Peggy did, however, obtain an order allowing her to seize $3,000
held in Molly’s bank account with which to partially satisfy the debt. Peggy also
discovered that Molly had for her personal use a wide-screen television set worth
approximately $1,000 which was being held by Harold, a television repairer for the
costs of repair. Peggy asked him to turn over the television because her lien had priority,
but Harold refused.
What is the most likely reason that the judge refused to allow the sheriff to seize
Molly’s equipment?
A. It would have been worth more than that owed to Peggy.
B. It was not listed as assets in the original complaint filed with the court.
C. It was exempt as tools and instruments needed to carry on a trade.
D. Peggy had a duty to exhaust all other avenues of recovery before seizing those items.
E. She incorrectly asked the sheriff to involve law enforcement and should have seized
the goods herself.
“Chocolate Chips.” Molly makes great chocolate chip cookies and sells them in her café
called “Molly’s Famous Chocolate Chips.” Some of her friends express interest in
selling her cookies. They want to use her name and identify the cookies as “Molly’s
Famous Chocolate Chips.” Seeing a business opportunity, Molly agrees to bake the
cookies and provide them in a frozen state to her friends who will open other cafés
under her café’s name. Molly strictly controls all packaging and sales. She also
frequently inspects kitchens used by the sellers pursuant to her agreements with them.
Suzette, one of Molly’s friends who entered into an agreement with Molly to open a
café and sell the cookies, was not being sufficiently careful and negligently put a
harmful ingredient into the cookie dough resulting in a customer, Fred, becoming ill.
Fred threatens to sue both Suzette and Molly. Molly is so exasperated that she cancels
all the franchise contracts on the basis of aggravation. Although the franchise
agreements provide that so long as requirements are met, the franchise agreements are
good for a period of two years, Molly takes the position that the cookies involve a
personal service using a trade secret and that she cannot be held liable for
discontinuation.
Will Molly likely be held liable to Fred?
A. Yes, but only if Suzette has officially filed for bankruptcy protection.
B. Yes, but only if Suzette is insolvent.
C. Yes, because the cookies had her name on them.
D. No, because she was a franchisor.
E. It is unclear and depends on whether she exercised too much authority in the
day-to-day affairs of Suzette’s business.
Upon which type of law is product liability law primarily based?
A. Contract law.
B. Tort law.
C. Administrative law.
D. Legislative law.
E. Executive law.
The transfer and distribution of risk done by an insurer is known as _____.
A. Insurance management
B. Insured protection
C. Spread protection
D. Risk management
E. Casualty management
What is the amount of the homestead exemption?
A. $100,000
B. $50,000
C. $25,000
D. $10,000
E. It varies from state to state
When all products of a particular design are defective and dangerous, those products
have which of the following type of defects?
A. Design.
B. Warning.
C. Primary.
D. Exclusionary.
E. Manufacturing.
“Refused Furniture.” Selina arranges to sell furniture from her furniture store to Roland
for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay
the remainder in monthly installments. Selina was to deliver the furniture by February
7. Roland did not pay Selina as promised on February 1. He asked her to wait until
March 1, but she refused. She told him that the contract was canceled, and she refused
to deliver the furniture at all. Selina was able to sell the furniture for only $2,500
because of a downturn in the economy. Roland told Selina that she had no right to
withhold or sell his furniture and that he was suing. Selina also incurred $100 in
additional amounts in advertising costs to advertise the furniture that Roland initially
purchased. Selina saved $40 in delivery costs because she did not have to deliver the
furniture to Roland. The subsequent purchaser picked up her own furniture.
Which of the following is true regarding Roland’s claim that Selina had no right to
withhold his furniture?
A. Roland is correct. Selina was required to deliver the furniture, but she retained the
right to sue him for any deficiency.
B. Roland is correct but only because of the special UCC exception for consumer
goods.
C. Roland is incorrect. Selina had a right to withhold the furniture.
D. Roland is incorrect but only if Selina can prove that she had no reason to believe that
he was a credit risk prior to signing the contract of sale.
E. Roland is correct because of federal consumer protection laws.
Under UCC 2-702(2), under which of the following circumstances may a seller reclaim
goods when a buyer is in possession of goods and is in breach?
A. When the seller discovers the buyer is insolvent
B. When the buyer is at least 5 days late on a payment
C. When the buyer is at least 10 days late on a payment
D. When the buyer has received at least 10 days prior notification of reclamation
E. When the buyer has received at least 30 days prior notification of reclamation
“New Furniture.” Penny purchased $3,000 worth of furniture from Good Wood
Furniture. Through an arrangement with Good Wood, Penny financed the purchase
through a financing company called Let Us Help You. Twenty-nine days after the goods
were delivered to her, Penny had a disagreement with Let Us Help You regarding the
amount of interest she would be required to pay. She notified Good Wood on that day
that she was rejecting the goods. Good Wood claimed that she did not properly reject
the furniture and also that she failed to act in good faith, an obligation imposed equally
on all parties to a transaction. Penny says that she properly rejected; that, although the
UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she
had an absolute right to return the goods.
Which of the following is true regarding the claim of Good Wood that Penny failed to
properly reject the goods?
A. Good Wood is incorrect because under the UCC Penny had 30 days in which to
reject the goods.
B. Good Wood is incorrect only if Penny can establish that Let Us Help You
miscalculated the amount of interest she owed.
C. Good Wood is incorrect only if Penny can show that the goods were overpriced.
D. Good Wood is correct only if Good Wood can show that the goods were priced at
reasonable market value.
E. Good Wood is correct.
Although there are some exceptions, a[n] ______ mistake does not generally void a
contract.
A. Unclear
B. Mutual
C. Unilateral
D. Clear
E. Single
Which of the following is true regarding the No Electronic Theft Act?
A. It provides that it is legal for a person to infringe a copyright so long as financial
gain is not involved.
B. It provides that it is illegal for a person to reproduce, even for no financial gain, the
copyrighted work of another; but there are only civil damages available, no criminal
penalties.
C. It provides that it is illegal for a person to reproduce, even for no financial gain, the
copyrighted work of another; and criminal penalties including imprisonment for up to
five years may be imposed.
D. It provides that it is illegal for a person to reproduce, even for no financial gain, the
copyrighted work of another; and criminal penalties in the form of fines, but not
imprisonment, may be imposed.
E. It provides that it is illegal for a person to reproduce, even for no financial gain, the
copyrighted work of another; but the only remedy available would be an injunction
requiring that the offender cease the infringement.
“Bad Check.” Mindy, a bank teller, saw that customer Fred did not have sufficient funds
in his account to cover a check presented for payment. Mindy was new and was
confused about what to do with the check. She asked the bank manager, Trevor, about
any available options. Trevor told her that the bank was required by law to dishonor the
check, that the check should be returned to the holder with a notation that it had been
dishonored, and that it could not be presented again. Mindy asked Trevor if there were
any policies the bank could institute to provide customers with overdraft protection, and
Trevor answered that those were prohibited by law.
Which of the following is true regarding Trevor’s statement that the bank’s only choice
was to dishonor the check?
A. Trevor is correct.
B. Trevor is incorrect because under the UCC, the bank could have created an overdraft
by paying the check and later charging the account the amount short.
C. Trevor is incorrect because under the UCC, the bank could have created a
subsequent draft by paying the check, and the bank would then have needed to seek the
customer’s permission to charge his account the amount short.
D. Trevor is incorrect because under the UCC, the bank could have created a secondary
draft by paying the check and charging the account the amount short.
E. Trevor is incorrect because under the UCC, the bank could have created an excessive
draft by paying the check and closing the account at which point, the customer would
be free to open a new account.
Assume a restaurant chain is forced to pay damages for breach of contract to a supplier.
What type of law is involved?
A. Public law only
B. Private law only
C. Civil law only
D. Public, private, and civil law
E. Private law and civil law
Which of the following is true regarding the apprehension necessary for the tort of
assault?
A. Apprehension and fear are the same thing.
B. A person may be in apprehension of physical harm, even if the same person is too
courageous to be afraid of that physical harm.
C. Actual injury is necessary for valid apprehension to be proven.
D. The test for assault involves subjective apprehension, not reasonable apprehension.
E. There is no requirement that the apprehension be of immediate physical contact.
Which of the following is an exception to the rule that administrative searches usually
require search warrants?
A. The regulatory exception
B. The reasonable-search exception
C. The pervasive-regulation exception
D. The compelling-need exception
E. The controlling-principle exception
Which of the following was the result on appeal in Merisier v. Bank of America, the
case in the text in which the plaintiff sued challenging the bank’s determination that
based on her involvement, she was not entitled to funds obtained through alleged
fraudulent use of her debit card?
A. On the basis that it was not clearly erroneous, the court on appeal upheld the lower
court’s decision in favor of the bank.
B. Although recognizing that no deference was due the trial court’s decision in favor of
the defending bank, the appellate court ruled in favor of the defending bank based on its
own review of the facts.
C. The appellate court ruled in favor of the defending bank on the basis that because the
plaintiff’s PIN number was used, she had no right to recover for alleged fraudulent
transactions.
D. The appellate court ruled in favor of the plaintiff because the decision of the lower
court in favor of the defending bank was clearly erroneous.
E. Recognizing that no deference was due the trial court’s decision in favor of the
defending bank, the appellate court ruled in favor of the plaintiff because the evidence
preponderated in her favor.
The duration of one’s ownership interest and the power one has over using the land
depends on the type of ______ one is said to hold.
A. Condition
B. Estate
C. Tenancy
D. Dominion
E. Territory
Which of the following occurs when someone unlawfully enters a building with the
intent to commit a felony?
A. Robbery
B. Burglary
C. Larceny
D. Arson
E. Criminal fraud
As long as some of the duties under a contract have not yet been performed, the
contract is considered ________________.
A. Executory
B. Executed
C. Anticipatory
D. Ended
E. Stopped
In states that do not have state EEOCs, the aggrieved party must file the charge with the
federal EEOC within ______ days of the alleged discriminatory act.
A. 30
B. 60
C. 90
D. 180
E. 365
Which of the following was the result at the U.S. Supreme Court in Bates v. Dow
Agrosciences, LLC, the case in the text in which the Dow filed a declaratory judgment
seeking a determination that farmers’ claims against it involving a pesticide that
allegedly failed to perform as claimed and damaged peanut crops were preempted by
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)?
A. The Court found that petitioners’ claims alleging defective design were essentially a
“disguised” failure-to-warn claim and therefore preempted.
B. The Court found that federal law preempted all the plaintiffs’ claims because they
essentially requested that the defendant alter its product label.
C. The Court ruled that FIFRA does not preclude states from providing a remedy to
those injured as a result of a manufacturer’s violation of FIFRA’s labeling requirements.
D. The Court ruled that while an attempt to require that the defendant change its label
was allowed under FIFRA, a claim for monetary damages was preempted.
E. The Court ruled that while the plaintiffs could proceed with claims of fraud, all other
claims were preempted.
“Consumer Debt.” Mona had not been keeping up with her spending and bought several
expensive items. She had numerous credit cards and some unsecured loans. She had a
total of 14 creditors. All her debt was consumer debt, and Mona really wished that she
had not put all those new clothes on her credit card. Although Mona was struggling, she
did not want to file for bankruptcy because she did not want a bad credit score. Three of
her credit card companies, however, who had unsecured claims against her totaling
$14,500, signed and filed an involuntary bankruptcy petition against her under Chapter
7. Mona is unsure about how to proceed. While she is several months behind on a
number of payments, including alimony payments she believes were unfairly awarded
to her ex-husband, she does not particularly want to go bankrupt. She believe that the
creditors have been unfair in not allowing her additional time in which to pay. On the
other hand, she would really like to be rid of her excessive debt and stop collection
efforts on the part of her ex-husband.
If Mona convinces the judge that the creditors have filed the involuntary bankruptcy
frivolously, which of the following is true regarding what amounts, if any, the court
may force the creditors to pay?
A. The court may award attorney costs, fees of the debtor, and punitive damages.
B. The court may award attorney costs and fees of the debtor, but not punitive damages.
C. The court may award fees of the debtor, but not attorney costs or punitive damages.
D. The court may award punitive damages, but not attorney costs or fees of the debtor.
E. The judge may dismiss the involuntary bankruptcy petition, but no other relief is
available.
With goods in bailment, when is an insurable interest created?
A. Only when either party has title to the goods
B. When either party has title or a risk of loss, but not under any other circumstances
C. When either party has title, risk of loss, or other economic interest attached to the
goods
D. Two days after either party has title to the goods
E. Never – there is no such thing as an insurable interest in a goods-in-bailment contract
At trial a defense lawyer states that evidence should not be admitted because it is “fruit
of the poisonous tree.” Upon which of the following is the attorney relying?
A. The exclusionary rule.
B. The Fourth Amendment Rule.
C. The Eden Rule.
D. The Adam Rule.
E. The Eve Rule.
Which of the following is true regarding the nature of bailments?
A. Bailments may be express but not implied.
B. Bailments may be implied but not express.
C. Bailments may be implied or express.
D. Bailments that are not express may be enforced as implied bailments only if a
gratuitous bailment is involved.
E. Bailments that are not express may be enforced as implied bailments only if a mutual
benefit bailment is involved.
When a party’s liability for a negotiable instrument is terminated, this party’s liability
has been ____.
A. Terminated
B. Released
C. Discharged
D. Abrogated
E. Delivered
When may government agents search without a search warrant?
A. When law enforcement officials believe it is likely that the items sought will be
removed before they can obtain a warrant.
B. Outside of normal working hours for a judge.
C. When they can show that the suspect who lives in the residence at issue has been in
jail previously.
D. When they can show that a felony is involved.
E. When they can show that they have heightened probable cause.